Employers added 172,000 positions as unemployment remained at 4.3%, reinforcing evidence that the labor market is gaining momentum despite economic uncertainty

The United States labor market delivered another stronger-than-expected performance in May, with employers adding 172,000 jobs and the unemployment rate holding steady at 4.3%.

The figures extended a three-month stretch of solid hiring and provided fresh evidence that businesses remain willing to expand their workforces despite persistent inflation, geopolitical instability and uncertainty surrounding the broader economic outlook.

May’s employment growth followed revised gains of 214,000 jobs in March and 179,000 in April. Together, the results suggest that the slowdown observed during parts of the previous year may have given way to a more durable period of labor-market resilience.

Hiring was led by leisure and hospitality, which added 70,000 positions during the month. Restaurants and drinking establishments accounted for 48,000 of those jobs, signalling continued strength in consumer-facing services.

Local governments added 55,000 positions, while healthcare employment increased by 35,000. Social assistance and the mining, quarrying, oil and gas sector also recorded modest gains.

However, the improvement was not evenly distributed across the economy. Financial activities lost 22,000 jobs in May, continuing a longer-term decline in the sector. Employment in major industries including construction, manufacturing, retail and professional services showed little overall change.

Wage growth remained moderate. Average hourly earnings increased by 0.3% during May and were 3.4% higher than a year earlier. The average private-sector workweek remained unchanged at 34.3 hours.

The unemployment rate has now remained between 4.3% and 4.5% since July 2025, indicating that the labor market has maintained a relatively stable balance between job creation and the number of people seeking work. Labor-force participation also held steady at 61.8%.

Nevertheless, some indicators point to continuing challenges beneath the headline figures. Around 7.3 million Americans remained unemployed, while the number of people out of work for at least 27 weeks stood at approximately two million—more than half a million higher than a year earlier.

The unexpectedly strong employment report may complicate the Federal Reserve’s interest-rate decisions. A resilient labor market reduces the immediate need for monetary policymakers to support employment through lower borrowing costs, particularly while inflation remains a concern.

For households and businesses, May’s numbers offer reassurance that the economy continues to generate jobs at a healthy pace. Yet the concentration of hiring in service industries and local government, alongside continued weakness in finance and limited growth across several major sectors, suggests that the expansion remains uneven.

For now, the latest report strengthens the case that the U.S. labor market is entering the second half of 2026 with considerably more momentum than economists had anticipated.